Background Idiopathic pulmonary fibrosis (IPF) and pleuroparenchymal fibroelastosis (PPFE) are known to have poor outcomes but detailed examinations of prognostic significance of an association between these morphologic processes are lacking. Methods Retrospective observational study of independent derivation and validation cohorts of IPF populations. Upper-lobe PPFE extent was scored visually (vPPFE) as categories of absent, moderate, marked. Computerised upper-zone PPFE extent (cPPFE) was examined continuously and using a threshold of 2·5% pleural surface area. vPPFE and cPPFE were evaluated against 1-year FVC decline (estimated using mixed-effects models) and mortality. Multivariable models were adjusted for age, gender, smoking history, antifibrotic treatment and diffusion capacity for carbon monoxide. Findings PPFE prevalence was 49% (derivation cohort, n = 142) and 72% (validation cohort, n = 145). vPPFE marginally contributed 3–14% to variance in interstitial lung disease (ILD) severity across both cohorts. In multivariable models, marked vPPFE was independently associated with 1-year FVC decline (derivation: regression coefficient 18·3, 95 CI 8·47–28·2%; validation: 7·51, 1·85–13·2%) and mortality (derivation: hazard ratio [HR] 7·70, 95% CI 3·50–16·9; validation: HR 3·01, 1·33–6·81). Similarly, continuous and dichotomised cPPFE were associated with 1-year FVC decline and mortality (cPPFE ≥ 2·5% derivation: HR 5·26, 3·00–9·22; validation: HR 2·06, 1·28–3·31). Individuals with cPPFE ≥ 2·5% or marked vPPFE had the lowest median survival, the cPPFE threshold demonstrated greater discrimination of poor outcomes at two and three years than marked vPPFE. Interpretation PPFE quantification supports distinction of IPF patients with a worse outcome independent of established ILD severity measures. This has the potential to improve prognostic management and elucidate separate pathways of disease progression. Funding This research was funded in whole or in part by the Wellcome Trust [209,553/Z/17/Z] and the NIHR UCLH Biomedical Research Centre, UK.